Campbell to use 100% debt to fund acquisition of Bolthouse Farms

By Lisa Kerner

Charlotte, N.C., July 9 - Campbell Soup Co. will use a combination of short- and long-term borrowings to fund its $1.55 billion cash acquisition of Wm. Bolthouse Farms Inc. from a fund managed by private equity firm Madison Dearborn Partners, LLC.

While the financing plan is "not completely set," it is expected to include a spread of maturities, from short-end commercial paper to fairly long-term money, Campbell senior vice president and chief financial officer B. Craig Owens said during a conference call on Monday.

Owens said Campbell is "entirely comfortable" completing the transaction with 100% debt. He has spoken to the rating agencies and expects "they will have something to say in the near future." (On Monday, Standard & Poor's and Moody's Investors Service placed the company under review for possible downgrade.)

The $1.55 billion purchase price is a debt-free, cash-free number that does not include any Bolthouse Farms debt, said Owens.

Campbell has temporarily suspended its strategic share repurchases as a result of the Bolthouse Farms purchase. However, Owens said the company will continue to buy shares to offset dilution caused by shares issued through Campbell's compensation programs.

In addition, the transaction, which is expected to close in late summer, will not impact Campbell's dividend policy, according to Owens.

The company was advised by Morgan Stanley.

Campbell is a Camden, N.J.-based manufacturer and marketer of foods including soups, sauces and baked snacks.

Bolthouse is a vertically integrated food and beverage company based in Bakersfield, Calif.

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